ESP Flash Alert - Updates on Newly Activated Trades – Plus a New Option Trade

What Happens if Bond Yields Suddenly Reverse?

In this Flash Alert ESP update, I am adding a new option trade plus offering updates on my recently recommended a low risk high potential profit potential option trades while reiterating a recent stock trade which has just gone live.

Market Update – What if Bond Yields Are Close to Topping Out?

The stock market is recovering some this morning, but the short term outlook remains a bit murky, as bond yields are still hovering near their recent top. Investors also continue to fret about earnings and the Fed’s next move as next week’s heavy data week (GDP, October Payrolls, Private sector jobs data) looms.

The New York Stock Exchange Advance Decline line (NYAD), is attempting to recover after falling just below its 20 day moving average.  A further failure at this level could take the line to its 50-day line.  The RSI is also testing the 50 level.  If the RSI fails to hold above 50, the odds of a move down to 30 along with a test of the 50-day MA will increase.  Such a move, could provide a tradeable buy the dip opportunity.

The U.S. Ten Year Note yield (TNX)’s is nearing a decision point with the 200-day moving average and the 4.2% yield area being the key chart points.  A move above 4.2% would likely take TNX to 4.3%. Yet the RSI is very overbought and the uptrend in yields looks to be sagging.  Still, 4% remains a tough floor to crack.

The S&P 500 is holding above its 20-day moving average, which is a positive. SPX recently tagged its upper Bollinger Band and is pulling back as would be expected.  For more on how to use Bollinger Bands check out this video.

Extended Stay Portfolio Update

In today’s issue, I am adding a new option plays which offers the potential for significant gains when bond yields reverse. 

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